U.S. President Donald Trump on Friday signed into law the Paycheck
Protection Program Flexibility Act of 2020 that eases rules around how small
businesses can use their PPP loan funds, which could give additional aid to
hotels.
The minimum maturity for loans is now five years instead of
two. The eight-week coverage period has been changed to the earlier of 24 weeks
after the origination of the loan or Dec. 31, 2020. The act also changes the
employee rehire deadline date from June 30 to Dec. 31, 2020. In addition, there
are changes to the exemption based on employee availability; to the percentage
required to be spent on payroll from 75 percent to 60 percent; and to the
extended deferral period. Further, PPP borrowers now can take advantage of
delayed employer payroll taxes even if they are seeking forgiveness.
"The PPP changes passed by both chambers are another
important step in providing relief to small businesses that otherwise will not
survive until the economic recovery phase," said U.S. Travel Association
executive vice president of public affairs and policy Tori Emerson Barnes in a
statement.
"By extending the PPP and providing greater flexibility
to cover other costs so hotels can keep their doors open, these enhancements
will enable our small business owners to rehire and retain more
employees," said American Hotel & Lodging Association president and CEO
Chip Rogers in a statement after the bill passed the U.S. House of
Representatives last week.
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Updated Friday, June 5 at 1:29pm: This article has been updated to reflect that President Trump has now signed this bill into law.